Tag: cap-and-trade

Kim Strassel’s “Potomac Watch” column in today’s Wall Street Journal is based on an interview with Sen. Jim Inhofe (R-OK), ranking member of the Senate Environment and Public Works Committee, reacting to the climate science e-mail controversy. It’s Inhofe who gives Strassel’s column its title, “‘Cap and Trade Is Dead’,” arguing that politics and the now the scientific scandal from East Anglia makes climate-control legislation impossible. That’s Congress, but …

There’s still the EPA, which is preparing an “endangerment finding” that would allow it to regulate carbon on the grounds it is a danger to public health. It is here the emails might have the most direct effect. The agency has said repeatedly that it based its finding on the U.N. science—which is now at issue. The scandal puts new pressure on the EPA to accede to growing demands to make public the scientific basis of its actions.

Mr. Inhofe goes so far as to suggest that the agency might not now issue the finding. “The president knows how punitive this will be; he’s never wanted to do it through [the EPA] because that’s all on him.” The EPA was already out on a legal limb with its finding, and Mr. Inhofe argues that if it does go ahead, the CRU disclosure guarantees court limbo. “The way the far left used to stop us is to file lawsuits and stall and stall. We’ll do the same thing.”

An EPA endangerment finding and implementation of CO2 emission limits through a “tailoring rule” is legally suspect, to be sure, as an attempt by the Executive Branch to rewrite the Clean Air Act. Still, all the statements from the EPA and Administrator Lisa Jackson have pointed in that direction.
More…

The Wall Street Journal Europe editorializes in “How to Forge a Consensus,” contending in the sub-headline, “The impression left by the Climategate emails is that the global warming game has been rigged from the start.”

The New York Times reports on Nov. 25, “Businesses in U.S. Brace for New Rules on Emissions.” The story covers President Obama’s announcement of emission reduction targets, made in anticipation of his trip to the Copenhagen climate meeting. It’s OK, although the failure to mention Climategate and the possibility of an EPA endangerment finding seems like pretty big holes.

Otis Rawl, president and CEO of the South Carolina Chamber of Commerce, chats with Jay Timmons, executive vice president of the National Association of Manufacturers, in his CEO Corner video interviews.

All across the country, and I’m sure in South Carolina it’s exactly the same: Health care costs are skyrocketing. It’s a problem for business, it’s a problem for employers. Ninety-seven perfect of the members of the National Association of Manufacturers provide good quality health-care benefits for the employees, and we don’t want to risk that, we don’t want to lose that, and we don’t want to see our manufacturers who are providing those benefits have to pay more in taxes. That doesn’t make sense.

South Carolina received big manufacturing-related news late last month when Boeing announced it had chosen its North Charleston, S.C., facility for a second final assembly site for the 787 Dreamliner program. (Boeing news release.) Interesting to see Rawl’s reaction in this column in The Item newspaper on the implications for the state: Business is concerned about education and training.

Otis Rawl, head of the state Chamber of Commerce, said a big-picture view had to focus on Boeing’s suppliers, many of whom likely would move to the state to be able to be near to the plant.

Those jobs generally will locate within a 100-mile radius of the North Charleston plant, which means some job help for rural areas, he said. “This announcement sends the message that South Carolina has gotten back in the game of economic development,” Rawl said. “It gives us all a little sense of things getting better.” Perhaps one thing that the Boeing announcement will force, Rawl added, is a refocused political debate on how to reshape a huge driver of all economic development – how the state educates its residents.

“We’re going to have to take a look at some type of statewide funding for public education,” he said.

The White House has set Dec. 3 as the date for President Obama’s “Forum on Jobs and Economic Growth.” Press statement, via Fox because it’s not yet posted at WhiteHouse.gov.

White House Announces December Date for Forum on Jobs and Economic Growth

After Forum, President Obama to Kick-off White House to Main Street Tour with Stop in Allentown, Pennsylvania

WASHINGTON, DC- The Obama Administration announced plans today to hold the Forum on Jobs and Economic Growth on Thursday, December 3rd at the White House. The forum will be an opportunity for the President and the economic team to hear from some of the best and brightest CEOs, small business owners, and financial experts about ideas for continuing to grow the economy and put Americans back to work.

“During these difficult economic times, we have a responsibility to consider all good ideas to encourage and accelerate job creation in this country. At the forum next month, I am looking forward to hearing from the private sector, from CEOs and small business owners and from Americans struggling to make ends meet on how we can work together to create jobs and get this economy moving again,” said President Barack Obama.

The President will follow the forum with a visit to Allentown, Pennsylvania the following day where he will kick off a White House to Main Street Tour that will take him to cities and towns across the country over the course of the next few months. In an effort to spend some time out of Washington and take the temperature on what Americans are experiencing during these challenging economic times, the President will visit communities across the country over the next several months where he will speak with workers and share ideas for continued recovery.

Two suggestions for improving the value of the forum (and kudos to the White House for using the term “forum” instead of the hyperbole of “summit”):

Eschew the usual political rhetoric about “green jobs” and the “green economy.” The rhetoric is too easy a way to slip past frank economic discussions.

Acknowledge that some policies pursued by the Obama Administration and Congress damage jobs creation. Billions of dollars of additional taxes on employers to fund the health care legislation raise the marginal costs of hiring. The incredible flood of regulations coming from the Environmental Protection Agency imposes compliance costs that discourage more productive capital investment. Raising the cost of energy under cap-and-trade will slow the economy. Be honest about it.

Senate leader Harry Reid, facing a handful of moderate Democrats who might not vote for a bill that contains the public option of a government-run program that liberals favor, said Tuesday that his chamber would “not be bound by any timelines.”

The climate-change bill that has been moving slowly through the Senate will face a stark political reality when it emerges for committee debate on Tuesday: With Democrats deeply divided on the issue, unless some Republican lawmakers risk the backlash for signing on to the legislation, there is almost no hope for passage.

The taxpayers expect us to know what this 1,000-page bill costs before we start voting on it. They will only know this if we have a full economic analysis of how Kerry-Boxer affects them. This bill threatens Americans with trillions of dollars in higher energy taxes and millions of lost jobs. Yet as EPA Administrator Lisa Jackson admitted this week, EPA has”‘not run the full economic modeling.” We cannot move forward in the legislative process if we don’t have a complete understanding of this bill.

The chairman’s mark of the 959-page Kerry-Boxer bill is available here.

Our favorite provision assigns great power but diffused accountability to the newly created Offsets Integrity Advisory Board, page 558:

‘‘PART D—OFFSETS
‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.
‘‘(a) ESTABLISHMENT.—Not later than 30 days after the date of enactment of this title, the President shall establish an independent Offsets Integrity Advisory Board. The Advisory Board shall make recommendations to the President for use in promulgating and revising regulations under this part, and for ensuring the overall environmental integrity of the programs established pursuant to those regulations.

I had two main points. The first, one that was comprehensively ignored by the Democrats on the Committee and the other witnesses, is that the only big example we have for a cap and trade program for greenhouse gases, the European Union Emissions Trading Scheme (ETS), has been an expensive failure. Indeed, the vast cost — already far more than “a postage stamp a day” for European households — has been confirmed in a new report by my colleagues at the Taxpayers’ Alliance in London.

The ETS, the report finds, cost the EU economies as much as $171 billion in 2008. The cost to individual households in the U.K. was about $200. Moreover, climate change policies now account for 14 percent of the average household’s electricity bill and 21 percent of the average industrial electricity bill.

Murray also makes a few sharp observations about the protectionism stalking the committee debate.

The other main point in my testimony was that China, India, and the other developing nations will not accept any limitations on their emissions. The other panelists went to great lengths to pretend that this doesn’t really matter, but at the same time they all argued that all nations must accept binding emissions targets. For instance, they argued that Copenhagen must not be seen as Kyoto II. But China, India, and the G77 have stated firmly and without any room for argument that the Kyoto framework must continue: Developed nations must cut emissions while developing nations can take other actions, not requiring cuts in emissions. This is a circle that cannot be squared.

The Senate Environment and Public Works Committee today held its second of three hearings on S. 1733, the Clean Energy Jobs and American Power Act, i.e., the Kerry-Boxer bill to restructure the U.S. economy through regulation, subsidy, taxation and more expensive energy.

Twenty-seven witnesses were scheduled to testify on four separate panels, which seems like too many really to pay close attention to.

Federal Government Credit Allocation. This system allows elected political leaders to choose “winners and losers” in the economy. Waxman-Markey directs that every commercial user of energy would be given a certain number of carbon credits, permitting it to emit a specific amount of carbon each year. If a manufacturer exceeds its credits, it has to purchase extra credits from others who do not reach their cap. This system has too much risk for global manufacturers who are making decisions about their future capital investments today. Congress allocating credits is a critical decision because Virginia and other states will lose opportunities to compete and create jobs in the future as long as the threat of this allocation system exists in the public debate.

And …

Leakage. Proponents of “cap & trade” believe immediate regulation will force industry to stop using traditional sources of energy. Unfortunately, this position demonstrates a fundamental misunderstanding of global manufacturing today. The truth is “cap & trade” is just another tax on businesses and consumers – regressively so on manufacturing – and it does nothing to stop “leakage” to nations with more favorable conditions. For example, even if Virginia limited all of its CO2 emissions, China’s CO2 emissions growth alone would replace all of Virginia’s CO2 emissions in only 77 days. Virginia is .44% of the global GHG emissions.

Margo Thorning, chief economist at the conservative American Council for Capital Formation, criticized the June prediction for using a static economic model rather than a macroeconomic one, which would show how higher energy prices reverberate throughout the economy. She added that the assumption embedded in the EPA analysis that Boxer cited — a 150 percent increase in the number of nuclear plants by 2050 — was unrealistic.

But studies projecting large job losses are similarly based on data that have not been established. One by the American Council for Capital Formation and the National Association of Manufacturers found that up to 2.4 million jobs could be lost by 2030 in part because it assumed that only half as many carbon offsets would be available to keep energy prices lower. Another, by the Charles River Associates for the National Black Chamber of Commerce predicted a 2.2 million job loss by 2030 because of plugging in higher cost estimates for nuclear and geothermal energy projects. “There’s never a single, precise answer,” said Ken Ostrowski, a director at McKinsey and Co. who helped write the firm’s reports on the cost of cutting U.S. greenhouse gas emissions and improving energy efficiency.

“You have to deal with uncertainties like the speed at which the technology could be implemented.”

Analyses aside, one should also apply the test of common-sense to Kerry-Boxer/Waxman-Markey: Proponents wants to create scores of new federal government programs and regulatory regimes, including the establishment of an expansive and intrusive system of “cap and trade” to make energy more expensive. And that’s supposed to create jobs AND substantively address GLOBAL warming?

Elsewhere in the Post, columnist Dana Milbank maligns Sen. Jim Inhofe (R-OK) for challenging the scientific consensus of global warming, which too often looks like an imposed political consensus. From “A senator in a hostile climate“:

It must be very lonely being the last flat-earther.

Sen. Jim Inhofe of Oklahoma, committed climate-change denier, found himself in just such a position Tuesday morning as the Senate environment committee, on which he is the ranking Republican, took up legislation on global warming.

That’s just a slur, two slurs, in fact. “Flat-earther” is the equivalent of calling the Senator deluded and dumb. “Clime-change denier” is worse, tantamount to calling the Senator evil. Denier is the preferred term of those who want to stop informed debate of the science of global warming, an especially ugly choice of words because of its parallels to “Holocaust denier.”

The goal of this rhetoric is to delegitimize the speech involved in acknowledging the scientific and policy implications of the now decade-long temperature plateau. Or to bully into silence the increasing number of the public who doubt that global warming is man-made. These citizens, voters, taxpayers are either stupid or evil, so they better shut up.

Bad atmosphere in which to make good policy. Good atmosphere in which to make bad policy.

We find Senator Inhofe’s media webpage and especially his EPW Press Blog to be centers of intelligent policy discussions, informed by a healthy skepticism of analyses, claims and wild promises. Too bad some in the media prefer slurs to skepticism and squelching to speech.

Indiana Governor Mitch Daniels, a Republican, was on Fox News Sunday, on a panel with, among others, Michigan Governor Jennifer Granholm, a Democrat. Gov. Daniels refers to the stimulative effects of “Major Moves,” an infrastructure investment program that included leasing the Indiana Toll Road for $3.85 billion.

DANIELS: [You] know, before Washington could spell stimulus, we had a pretty robust program almost accidentally here in Indiana.

We’re in the middle of the biggest road-building, infrastructure- building, project in state history. We did it without — by the way, without a penny of taxes or borrowing. You really couldn’t spend a whole lot more than we are in that respect.

We cut property taxes big time last year. The average Hoosier homeowners got $500-plus more in their pocket this year. You know, but there are just limits to what can be done other than to, as Mr. Wynn said, try to create more favorable conditions for natural growth in the — in the private sector.

And you know, I’m very much concerned, as he expressed, that meanwhile an awful lot of energy and an awful lot of policy in Washington is headed just the wrong direction. (continue reading…)

Let me emphasize something very strongly as we begin this discussion. The United States has already this year alone achieved a 6 percent reduction in emissions simply because of the downturn in the economy, so we are effectively saying we need to go another 14 percent.

[The] European Union’s promise to cut emissions by 15 per cent below 1990 levels by 2010 has been facilitated not only by the collapse of Britain’s coal industry but also by German reunification, which has resulted in reduced emissions in part because of the closure of factories in the former East Germany.